Completed Foreclosures Up in May
The number of completed foreclosures in the U.S. was up slightly in May compared to April; however, the foreclosure inventory was down. The foreclosure inventory is the number of homes in process of foreclosure. The completed number increased by 3.5%; or 2,000 more foreclosures compared to April. Despite a slight rise in completed foreclosures during the month of May, both the completed and the inventory numbers remain lower than that of a year ago.
Statistics from the housing market in May reveal 1.0 million homes in the U.S. are in a stage of foreclosing. However, this number is lower than the 1.4 million homes in the process of foreclosing in May 2012.
What is the Shadow Inventory and What Does it’s Decrease Mean?
The shadow inventory is calculated by adding the properties held as real estate owned by mortgage servicers that are not listed in MLS, and the number of properties that are seriously delinquent. As of April 2013, the shadow inventory was $314 billion- down significantly from $386 billion in April 2012. The total number of units in the shadow inventory is officially under 2 million. At it's peak in 2010, the inventory contained 3 million homes.
The shadow inventory is down largely because of the lowest delinquency rate since 2008. This means the total delinquencies is only 5.6% of all mortgaged properties. Experts in the industry attribute the low percentage to affordability and consumer confidence. The shadow inventory decrease suggests significant market recovery compared to the state of the market in the years prior.
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